Ethena Labs Bows Out of Hyperliquid Stablecoin Race, Favoring Native Markets

By: Eva Baxter

Ethena Labs has officially withdrawn its bid to issue Hyperliquid's USDH stablecoin, a move applauded by industry onlookers who note the shift clears the way for the Native Markets team to take the lead. The decision came after Ethena faced concerns regarding its involvement, specifically its position within the Hyperliquid ecosystem, as noted by Ethena's founder, Guy Young.

In a post on social media platform X, Young confirmed the withdrawal, citing challenges raised by validators and community members. The concerns primarily played around Ethena not being a native entity to Hyperliquid while running several products besides USDH and having ambitions beyond one exchange partnership. Rather than contest these perceptions, Ethena opted to step aside, highlighting its intention to avoid a prolonged debate. Their offer included backing the stablecoin with USDtb connected to BlackRock’s BUIDL, and promises of significant financial incentives.

Ethena’s exit is seen to boost Native Markets, a group that was already perceived as a favorite before Ethena's withdrawal. This aspect was acknowledged by Young, who extended his congratulations to the rival team and addressed skeptics questioning Native Markets' credibility. Young underlined that Hyperliquid's community-driven ethos enables newcomers to make substantial inroads despite size, pedigree, or financial resources. Crypto communities are often spaces where innovative players can win the hearts and minds of the collective.

Although its USDH bid has ended, Ethena's larger ambitions on Hyperliquid remain firm. The team continues to prioritize developing products such as synthetic dollars (hUSDe) and USDe-powered savings, card products, and strategic hedging tools for Hyperliquid markets. Additionally, Guy Young iterated Ethena's commitment to doubling down on innovation going forward, encapsulated in their clear focus on product competition.